Sale of Inherited Home

Forum|Forum|3 years ago
March 18, 2023
1 reply
21 views

Client received a 1099-NEC with box 1 checked for the proceeds on the sale of a home. He split the proceeds of his deceased wife's home with his step children. The 1099-NEC is throwing me, is this reported as other income?

Sorry if this is a duplicate post but it seems as if my last post is in the abyss, waited 30 minutes and it never posted or I'm really impatient. 🙂

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Best answer by BobKamman

He said he was not executor of the estate. House went from mother in law, to wife and her siblings. He inherited his deceased wife's portion.

The fog is beginning to clear. Is the amount on the 1099, just his share of the proceeds? Then it's just a problem with a confused paralegal using the wrong form. Ask them for a corrected one, showing zero. Not really his problem if they don't issue a 1099-S, as long as he reports the sale anyway.

sjrcpa

Level 15

1099-NEC and not 1099-S?

If it was wife's home, was the estate listed as the seller on the settlement sheet?

Did taxpayer split the money with the kids because he thought it was right?

Or were they named as beneficiaries in the will?

The more I know the more I don’t know.

P

PremierTaxTravelAuthor

Level 3

yes 1099-NEC and not 1099-S

Just received additional details: The wife's mother owned the house, she passed away, house was passed down to his wife who also passed away, house was then passed to him and his wife's siblings* (not his step children). Sorry for the confusion- I mistook the "children" to be his wife's children and not her mother's children.

No will and no settlement sheet just the 1099-nec from the attorney.

qbteachmt

Level 15

"just the 1099-nec from the attorney."

Make them issue a Correction. A 1099-NEC for zero because that form is for Services rendered by a party to their law firm, as if that is self-employment income to your client.

Then, they should issue the right form: 1099-S.

You also need all of the dates of death, and if this is a community property state or common law property state.

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